The Owners Corporation of Strata Plan 62254 v Rockdale City Council

Case •

[2008] NSWSC 392

•

9 May 2008

No judgment structure available for this case.
CITATION: The Owners Corporation of Strata Plan 62254 v Rockdale City Council [2008] NSWSC 392
This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S): 23/04/08, 24/04/08
 
JUDGMENT DATE : 
9 May 2008
JURISDICTION: Equity Division
Technology and Construction List
JUDGMENT OF: Einstein J
DECISION: Council liable for negligence and breach of statutory duty – Matter to be referred to a referee to determine damages
CATCHWORDS: Tort - Negligence - Breach of statutory duty - Common law duty of care - Statutory authority - Essential fire services - Effective height - Development application - Sprinklers - Occupation certificates - Factor of control - Wednesbury unreasonableness - Control of a structure - Self-imposed duty to take positive action - Standing of Owners Corporation to bring proceedings
LEGISLATION CITED: Building Code of Australia
Civil Liability Act 2002
Civil Liability Amendment (Personal Responsibility) Act 2002
Civil Liability Regulation 2003
Environmental Planning and Assessment Act 1979
Environmental Planning and Assessment Amendment Act 1997
Environmental Planning and Assessment (Savings and Transitional) Amendment Act 1998
Legal Profession Act 2004
Local Government Act 1993
Local Government (Approvals) Regulation 1993
Local Government Regulations Amendment (Building Code of Australia) Regulation 1997
Strata Schemes Management Act 1996
CATEGORY: Principal judgment
CASES CITED: Agar v Hyde (2000) 201 CLR 552
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223
Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512
Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520
Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410
Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1
Graham Barclay Oysters v Ryan (2002) 211 CLR 540
Hebburn Ltd, ex parte; Re Kearsley Shire Council (1947) 47 SR (NSW) 416
Holt v Cox (1997) 23 ACSR 590
Howard v Jarvis (1958) 98 CLR 177
Leichhardt Municipal Council v Montgomery (2007) 233 ALR 200
Pyrenees Shire Council v Day (1998) 192 CLR 330
Smith v Leurs (1945) 70 CLR 256
Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397
Sullivan v Moody (2001) 183 ALR 404; 75 ALJR 1570
Tepko Pty Ltd v Water Board (2001) 206 CLR 1
The Council of the Shire of Sutherland v Heyman and Another (1985) 157 CLR 424
PARTIES: The Owners Corporation of Strata Plan 62254 (Plaintiff)
Rockdale City Council (Defendant)
FILE NUMBER(S): SC 55100/05
COUNSEL: Ms E Olsson SC, Mr M Walsh (Plaintiff)
Mr R E Williams QC, Mr A Pickles (Defendant)
SOLICITORS: Manion McCosker (Plaintiff)
McCabe Terrill (Defendant)


IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST

Einstein J

Friday 9 May 2008

55100/05 The Owners Corporation of Strata Plan 62254 v Rockdale City Council

JUDGMENT

The proceedings

1 The proceedings before the Court are brought against Rockdale City Council [‘the Council’ or ‘RCC’] by the Owners Corporation of Strata Plan 62254, which plan comprises a residential strata subdivision on land known as 36-42 Princess Street Brighton–le-Sands ["the building"].

2 The building was constructed between 1993 and 1998.

3 The Council was the authority which approved the development of the site and was the principal certifying authority for the construction of the building.

4 The plaintiff contends that in connection with its conduct concerning matters pertaining to fire safety systems, the Council:


          i. acted negligently and/or

          ii. breached its statutory duty.

5 The plaintiff's case was that the Council's breaches of its duty of care and its negligence consisted in the fact that the defendant:

(a) permitted the builder to carry out works otherwise than in a proper and workmanlike manner;

(b) permitted the builder to carry out works contrary to relevant laws and approvals;

(c) knew or ought to have known that the builder was carrying out works otherwise than in a proper and workmanlike manner;

(d) knew or ought to have known that the builder was carrying out works contrary to relevant laws and approvals;

(e) acquiesced in the builder’s failure to carry out works in a proper and workmanlike manner;

(f) acquiesced in the builder’s failure to carry out works in accordance with relevant laws and approvals;

(g) failed to require the builder to rectify work which was carried out otherwise than in a proper and workmanlike manner;

(h) failed to require the builder to carry out works in accordance with relevant laws and approvals and in fact endorsed and ratified the builder’s non compliant works;

(i) approved or certified works which had been carried out otherwise than in a proper and workmanlike manner;

(j) approved or certified works which had been carried out contrary to relevant laws and approvals;

(k) approved or certified works which were not suitable for occupation or use as a residential building

(l) failed to warn the plaintiff that the works had or may not have been carried out in a proper and workmanlike manner; and

(m) failed to warn the plaintiff that the works had or may not have been carried out in accordance with relevant laws and approvals.

6 The plaintiff's case is that it suffered loss and damage as a result of the Council's conduct. Specifically, it will incur loss with respect to the installation of a suitable sprinkler system or alternative suitable fire safety system.

The key issues

7 The issues requiring to be addressed include:


          i. Does the defendant, as a statutory authority, have a duty of care towards the plaintiff in exercising its statutory powers with regards to development approval and certification?

          ii. If so, what was the content and nature of this duty of care, and was it breached by the defendant?

          iii. Did damage to the plaintiff occur as a result?

The quantum of damages

8 In relation to the damages issue the parties sensibly agreed to a regime whereunder, subject to the court being satisfied that this was a case where some damages had been shown, the question of quantum would be referred to a referee for report. An appropriate order was made accordingly.

Background facts

9 The following matters of background, which were generally unexceptional, are to be noted:


          i. The building has a rise in storeys of 11 and is classified under the Building Code of Australia (BCA) as a Class 2 (residential flat), Class 6(retail), Class 7a (carparking) and Class 9b (community facilities) building.

          ii. The construction is predominantly masonry walls, concrete floors with bounding construction of internal masonry walls and door firesets.

          iii. RCC was the authority which approved the development. It was also the principal certifying authority.

          iv. RCC initially owned the land on which Oceanview now stands and sold to the developer, Oceanview Group Holdings Pty Limited (“Oceanview”), receiving a combination of cash and carparking/community facilities in the development as consideration.

          v. As built, the ground level of the development comprises the entry lobby to the residential apartments, a Coles Supermarket and the entry/exit ramps to the carpark levels.

          vi. Levels 1-3 comprise carparking and at the eastern end of Level 3 there are RCC owned community facilities. Council owns part of the carparking levels, with a portion retained by the Owners Corporation for residential parking.

Essential fire services in buildings of greater than 25m effective height

10 One crucial issue which arose with respect to the development application was the issue of the ‘effective height’ of the building.

11 Under the Environmental Planning Assessment (Savings and Transitional) Regulations 1998 [made under the Environmental Planning and Assessment Act 1979] the definition of "Effective height " was as follows:


          "Effective height" means the height to the floor of the topmost story (excluding the topmost story if that contains only heating, ventilating, lift or other equipment, water tanks or similar device units) from the floor of the lowest story providing direct egress to a road or open space."

12 An accurate assessment of the effective height of the building was important because the Building Code of Australia (‘BCA’), at the material times, provided particular requirements in respect of essential fire services where the effective height of a building was over 25 metres. This was because the effective operating height of Fire Brigade ladders was 25 metres. One can readily see that if a fire occurred in a building which had an effective height of more than 25 metres, and if there was no sprinkler requirement for the roof of such a building, persons on the top story may not be accessible to the firefighters on their ladders.

The findings of facts surrounding the development approval

13 There are a number of matters of close detail which require to be mastered in order for a proper understanding of the plaintiff's case. It is necessary to chronicle the progression of a number of separate development applications which were made with respect to the building in question [not all of which were ultimately carried through to completion], and to examine the various steps by which the sundry development consents and building approvals issued by the Council came about.

The first (abortive) development application – DA 377/93 and BA 823/95

14 The building was initially approved by RCC on or about 16 August 1995. This approval was known as “DA 377/93”. A Building Application, known as “BA 823/95”, was also approved by RCC on or about 23 February 1996. As initially approved, the building encompassed two levels of underground parking to service a ground floor supermarket.

15 Both DA 377/93 and BA 823/95 effectively lapsed as the applicant, Oceanview Holdings Pty Limited, encountered difficulties with an issue concerning a right of way over part of the site. This problem led to a new development application being prepared and lodged in August 1996.

16 During the interregnum between the first and subsequent development applications [in July 2006], Mr White, a fire safety control manager with the Council, was specifically questioned by the developer in terms of the requirements in relation to effective height. Mr White advised the developer that if the effective height of the building was to exceed 25 metres it would require additional fire requirements including sprinkling of the entire building [Exhibit PX page 6].

The second development application – DA 226/96

17 Development Application 226/96 was lodged on 9 August 1996 and approved by RCC on 2 October 1996. DA 226/96 encompassed a similar building scheme to the earlier development approval; however the car parking was relocated from the basement to be above the ground floor supermarket, accessed by ramping facilities.

18 During the approval process, the Council retained an independent town-planning consultant, Robert Chambers of Briggs Brindle & Chambers, to assist with its assessment of the application and assist with the drafting of conditions of approval pertaining to the development. The consultant prepared a draft set of conditions which included a condition requiring compliance with Part E 1 of the BCA, adding a note to the following effect:


          "This will require the sprinklering of the entire building and provision of additional essential services as it exceeds 25 m in the effective height as defined by the Building Code of Australia. Alternatively, reduce the effective height to under 25 m" [letter from Briggs Brindle and Chambers]

19 An initial assessment of a development application approved on 2 October 1996 by the relevant officer of the Council, expressly noted that the building appeared to be in excess of 25 metres with a sprinkler system required. This assessment is to be found on page 5 of the letter from the Council to the developer of 20 August 1996 which includes the following:

          “It appears that the building height exceeds an effective height of 25 metres. In this regard, the whole building is to be provided with a suitable sprinkler system in accordance with clause E15 of the Building Code of Australia "

20 Condition 73(j) of the Development Approval required the applicant to comply with Part E1 of the BCA. While it was not expressly stated on the Development Approval, a key element of compliance with Part E1 of the BCA was the calculation of the effective height of the building. Part E.1.5 provided that buildings with an effective height of more than 25 metres were required to include, inter alia, a suitable sprinkler system, as well as other fire safety systems.

The third development application – DA 31/97

21 At some point around about the end of 1996 there was an amendment to the local environment plan which meant that development consents that had been granted became void: hence the developer had to effectively relodge the application. A further Development Application (DA 31/97) was lodged with RCC in January 1997 and approved by RCC on 4 June 1997. Council’s records state that the later application was ‘identical in form and substance to that which had been earlier approved’.

22 It was also a term and condition of the development approval relating to DA 31/97, being Condition 71(j), that the building comply with Part E1 of the BCA with respect to (inter alia) fire safety. Again, the DA conditions contained no express notation as to the draft Conditions of Consent (drafted by Robert Chambers) in relation to DA 226/96 that made explicitly clear that compliance with Part E1 of the BCA would require the sprinklering of the entire building.

Building Application 390/97

23 On 27 June 1997 a Building Application was lodged for the residential component of the building. This BA, known as “BA 390/97” was approved on 25 July 1997.

24 Plans dated June 1997, and received by the Council on either 15 or 25 July 1997 [Ex JPD4 E], purport to show that the building has an “effective height” of 24.995m. This was marked on the building plans. In fact, as the Council admits, by reference to the BCA definition, the effective height on the approved plans was in fact greater than 25 metres. This was due, at least in part, to the fact that the effective height recorded on the plans was calculated from the floor of the top story to a level representing the top of a set of fire stairs, rather than, as required, from the floor of the top story to the floor of the lowest story providing direct egress to a road or open space.

25 Despite the advice it had received from Robert Chambers in August 1996 to the contrary, the Council, in approving the Building Application, imposed no condition on the developer to install any sprinkler system and provided no reason as to why no such condition was imposed. The inference to be drawn is that RCC either did not direct its mind to the issue at all, or that it (mistakenly) considered that the effective height of the building was less than 25 metres [Rockdale City Council Building Approval dated 25 July 1997].

Further alterations to the approved plans

26 During construction, there were a number of significant applications made by the developer to RCC to alter the approved plans for the development. These included:


          Carpark sprinklers amendment

          i. By letter dated 15 October 1997 the defendant wrote to the developer confirming, inter alia, that sprinklers were required to the car park areas on levels 1-3 of the development.

          ii. No further action appears to have been taken by the defendant until July 1998 when officers of the defendant at a site inspection observed that the installation of sprinklers would not be possible due to the “as built” ceiling heights in the car parks being only 2.1 metres. This height would make the installation of a sprinkler system difficult as there would be insufficient clearance for vehicles moving under the pipework. A meeting was held wherein it was resolved that the developer would undertake analysis of an alternative solution.

          iii. The defendant received this analysis, prepared by Warrington Fire Research, in or about October 1998 and sought the views of the NSW Fire Brigade

          iv. The NSW Fire Brigade were dissatisfied with the analysis and requested substantially greater information.

          v. Rather than obtain the concurrence of the NSW Fire Brigade, the defendant obtained separate advice from Connell Wagner to the effect that sprinklers were unnecessary in the car park areas. However, Connell Wagner refused to certify the solution. The defendant then relied upon the analysis and certification of Warrington Fire Research, engaged by the developer. No sprinklers were installed in the car park areas.
          The “common area” relocation amendment – 16 April 1998
          i. On or about 16 April 1998 the developer lodged an application under Section 102 of the Environmental Planning and Assessment Act 1979 to amend the existing consent to encompass changes to the common areas. The amendment also made substantial changes to the treatment of the four end units on Level 9, by the addition of internal stairs and private roof top open space. These units were also to acquire an additional 100 square metres of private open space. The open space for common property was relocated from the podium level to the remaining rooftop space of some 800 square metres.
              [Section 102 Application dated 15 April 1998]

          ii. On or about 20 April 1998, the developer Micheal Issa wrote to the Defendant and asked for confirmation that the effective height was less that 25 metres (PX 196). He received confirmation on 24 April 1998 (PX 197).
          iii. On or about 29 May 1998 the defendant gave its approval to the application.
              [Section 102 Notice of Approval dated 29 May 1998]

          iv. There is no evidence from the defendant setting out whether any consideration was given to the issues concerning effective height or fire safety in general in the context of granting this approval, despite the developer’s enquiry, which clearly raised the issue.

          The mezzanine application – 29 September 1998

          i. At or about the same time as the defendant was considering the application for an alternative solution concerning sprinklers to the car park levels it received a section 96 application from the developer to add mezzanine levels to the residential units on level 9 of the development.

          ii. The section 96 application was approved by the defendant without any express consideration being given to the impact on the effective height of the building or any consequential impacts on fire related safety issues. There is no evidence filed by the defendant that explains how this amendment application was considered absent any analysis of its impact on these two critical issues.

          iii. On 5 November 1998 the section 96 application relating to the mezzanine levels on level 9 was approved by the defendant.

          iv. Considering the extensive size of the mezzanines, and the fact that they were added in addition to ensuites it is arguable that they should have not been considered mezzanines at all, rather they were the addition of a whole new storey, as defined in the BCA. In any event no analysis is evident in the Report prepared by officers of the defendant that the matter was fully considered.

          Section 149D application – works as executed – February 2000

          i. On 9 February 2000 the defendant wrote to Oceanview in relation to unapproved works undertaken as part of the development, including additional works to the Level 9 apartments not previously approved. Oceanview was invited to lodge a section 149D (Building Certificate) Application in relation to works as executed. This application was made by Oceanview later in February 2000 and appears to have been approved by the defendant on 22 March 2000. No analysis appears to have been undertaken concerning whether or not the work as executed reflected unfavourably on the earlier assessment of the defendant concerning effective height.

              [Item 7 RCC City Development Committee 15 March 2000]

The issuing of occupation certificates

27 RCC issued Interim Occupation Certificates on 18 April 2001.

28 RCC issued final occupation certificates for the residential component of the building in September 2001.

Discussions between the plaintiff and the RCC regarding fire safety

29 Between June 2001 and May 2002 preliminary discussion occurred between the Strata Manager of the Owners Corporation and RCC concerning the “effective height” of the building.

30 The Second Annual General Meeting of the Owners Corporation occurred on 1 May 2002 wherein it was resolved to fully investigate fire safety related issues.

31 Between May 2002 and October 2002 the Owners Corporation commissioned Solutions Consultants Pty Limited to advise on fire safety issues and provide assistance to the OC in dealings with RCC.

32 Between late 2002 and mid November 2004 RCC investigated the concerns of the OC and conducted its own investigations, engaging Holmes Fire & Safety to assist it in negotiations with the plaintiff.


          i. On 8 October 2002 NSW Fire Brigades wrote to Jason Powell, a fire engineer retained by the plaintiff, noting that as part of the investigation of effective height, the Level 10 mezzanine should be taken into account.

          ii. On 21 August 2003, an officer of the defendant, Greg Raft, noted in a memo to fellow officer, John Gilbert,
              “what is built is not what was originally approved, including provision of mezzanine level. Surely the height issue would have been addressed at this point”


          iii. On 17 November 2004 expert representatives of RCC and the OC met to discuss issues. The defendant gave the plaintiff a copy of a report it had received from Holmes Fire & Safety dated 15 November 2004. That Report conceded that the mezzanine levels had to be taken into account in the calculation of effective height.

          iv. On 10 January 2005 the NSW Fire Brigades wrote again to Jason Powell, a fire engineer retained by the plaintiff, noting that the building should be assessed as a building over 25 metres in effective height.


Examining the relevant legislative framework

33 In examining the relevant legislative framework it is important to recall what were the particular relevant approval dates. They were as follows


          i. The notice of the final development approval was 4 June 1997;

          ii. The building application was submitted on 27 June 1997;

          iii. The building application was approved on25 July 1997.

34 Section 76 of the Environmental Planning and Assessment Act 1979 [as in force prior to 1 July 1998] provides inter alia as follows:


          76. (1) Subject to this Act, where an environmental planning instrument provides that development specified therein may be carried out without the necessity for consent under this Act being obtained therefor, a person shall not carry out that development on land to which that provision applies except in accordance with the provisions of that instrument.
              (2) Subject to this Act, where an environmental planning instrument provides that development specified therein may not be carried out except with consent under this Act being obtained therefor, a person shall not carry out that development on land to which that provision applies unless-

                  (a) that consent has been obtained and is in force under this Act; and

                  (b) the development is carried out in accordance with the provisions of any conditions subject to which that consent was granted and of that instrument.
              (3) Subject to this Act, where an environmental planning instrument provides that development specified therein is prohibited, a person shall not carry out that development on land to which that provision applies.

35 Section 77 provides for the making of a development application by the owner of the land to which the development application relates or by a person with the consent in writing of such owner.

36 Section 90 is headed "Matters for consideration". Subsection (1) provided inter alia as follows:


          “In determining a development application, a consent authority shall take into consideration such of the following matters as are of relevance to the development the subject of that development application:”

          …

          (e) the character, location, citing, bulk, scale, shape, size, height, density, design or external appearance of that development.
          ……

          (s) any other prescribed matter.
              [emphasis added]

The Local Government Act 1993

37 Section 68 (1) identified what activities generally required approval of the Council:


          "A person may carry out an activity specified in [the relevant table] only with the prior approval of the Council, except in so far as this Act, the regulations or a local policy adopted under Part 3 allows the activity to be carried out without that approval"

38 Section 89 was entitled "Matters for consideration" and provided inter alia:


          "(1) In determining an application, the Council:

              (a) must not approve the application if the activity or the carrying out of the activity for which approval is sought would not comply with the requirements of any relevant regulation.

The Local Government Act 1993 - Regulation

39 Clause 12 of this regulation with which was in force at the relevant time, was headed "Matters for consideration by Council in determining whether to approve building applications".


          Clause 12 provided inter alia:

          (1) In determining an application for approval to erect a building the Council must take the following matters into consideration:

              …

              (c) size, height and lighting of rooms.
                  [emphasis added]…

          Clause 21 provided:

          Referral of certain applications to the New South Wales Fire Brigades

          21. (1) If an application for approval to erect a building is made in respect of the erection of a building proposed to exceed, or which exceeds, 25 m in height, a copy of the application (together with copies of the accompanying plans and specifications of the building) must be forwarded by the council, within 7 days after the application is made, to the Director-General of New South Wales Fire Brigades.

          (2) The Director-General of New South Wales Fire Brigades must furnish to the council a report dealing with such of the matters relating to the provisions of the Building Code of Australia as are referred to in the Table to this clause and as are relevant to the design and construction of the building.

          (3) The report is to indicated whether, in the opinion of the Director-General of New South Wales Fire Brigades, the matters referred to in the Table to this clause comply with the relevant provisions of the Building Code of Australia or are satisfactory to the Director-General.

          (4) The council is not to approve an application to which this clause applies unless it has received the report and it has taken the report into consideration.

          (5) Subclause (4) does not prevent the council from approving an application to which this clause applies, even though it has not yet received the report, if at least 35 days have passed since the application was lodged.

The Environmental Planning and Assessment (Savings and Transitional) Regulation 1998

40 Clause 46 of this regulation was headed "Certain approvals taken to be construction certificates".

41 Subsection (1) was in the following terms:


          "An approval granted and in force under the unamended LG Act 1993 for a prescribed activity involving building work is taken to be a construction certificate issued under the amended EP&A Act 1979.”

42 The importance of highlighting this subsection is to keep in mind that the Building Approval which was given in relation to the development application on 25 July 1997, became a construction certificate

43 Clause 64 of this regulation was headed "General Savings" and provided into alia:


          Subject to this Part:

          (a) anything begun under a provision of the unamended LG Act 1993 (whether begun before, on or after the appointed day) may be continued and completed under that Act as if the EP&A Amendment Acts had not been enacted, and

          (b) Subject to paragraph (a), anything done under a provision of the unamended LG Act 1993 that has been repealed by the EP&A Amendment Act and for which there is a corresponding provision in the amended EP&A Act 1979 (including anything arising under paragraph (a)) is taken to have been done under the corresponding provision of the amended EP&A Act 1979 .

          [I interpolate to note that the importance of this provision is that a "certificate of classification" which would have issued under the old Act now became a certificate of occupation under the EPA Act.]

Local Government Regulations Amendment (Building Code of Australia) Regulation 1997

44 These regulations provided for the use of the 1996 edition of the Building Code of Australia. There was no issue in the proceedings but that the 1996 building code applied to the building of present concern.

Environmental Planning and Assessment Amendment Act 1997

45 This 1997 Act introduced part 4A Certificates.

46 Section 109 C provided inter alia:


          (1) The following certificates… may be issued for the purpose of this Part:

              (a) A. "compliance certificate", being a certificate to the effect that:

              i. specified building work or subdivision work has been completed as specified in the certificate and complies with specified plans and specifications, or
              ii. a condition with respect to specified building work or subdivision work (being a condition attached to a development consent or complying development certificate) has been duly complied with
                  ….

47 Section 109 H was entitled "Restriction on issue of occupation certificates". This provided:


          Restriction on issue of compliance certificates

          109 G . A compliance certificate of the kind referred to in section 109C(1)(a)(i) or (ii) must not be issued for any building work or subdivision work unless the certifying authority is satisfied that a development consent or complying development certificate is in force with respect to the building or subdivision to which the work relates.

          Restriction on issue of occupation certificates

          109H . (1) There are two kinds of occupation certificates, as follows:

              (a) an “interim occupation certificate” that authorises a person to commence occupation or use of a partially completed new building, or to commence a new use of part of a building resulting from a change of building use for an existing building,

              (b) a “final occupation certificate” that authorises a person to commence occupation or use of a new building, or to commence a new use of a building resulting from a change of building use for an existing building.
                It is not necessary for an interim occupation certificate to be issued before a final occupation certificate is issued with respect to the same building.


          (2) An occupation certificate must not be issued unless any preconditions to the issue of the certificate that are specified in a development consent or complying development certificate have been met.

          (3) An interim occupation certificate must not be issued to authorise a person to commence to occupy or use a partially completed new building unless:


              (a) a development consent or complying development certificate is in force with respect to the building, and

              (b) in the case of a building erected pursuant to a development consent but not a complying development certificate, a construction certificate has been issued with respect to the plans and specifications for the building, and

              (c) the partially completed building is suitable for occupation or use in accordance with its classification under the Building Code of Australia , and

              (d) such other requirements as are required by the regulations to be complied with before such a certificate may be issued have been complied with.

          (4) An interim occupation certificate must not be issued to authorise a person to commence a new use of part of a building resulting from a change of building use for an existing building unless:


              (a) a development consent or complying development certificate is in force with respect to the change of building use, and

              (b) the part of the building is suitable for occupation or use in accordance with tis classification under the Building Code of Australia , and

              (c) such other requirements as are required by the regulations to be complied with before such a certificate may be issued have been complied with.

          (5) A final occupation certificate must not be issued to authorise a person to commence occupation or use of a new building unless:

              (a) a development consent or complying development certificate is in force with respect to the change of building use, and

              (b) in the case of a building erected pursuant to a development consent but not a complying development certificate, a construction certificate has been issued with respect to the plans and specifications for the building, and

              (c) the building is suitable for occupation or use in accordance with its classifications under the Building Code of Australia , and

              (d) such other matters as are required by the regulations to be complied with before such a certificate may be issued have been complied with.
          (6) A final occupation certificate must not be issued to authorise a person to commence a new use of a building resulting from a change of building use for an existing building unless:


              (a) a development consent or complying development certificate is in force with respect to the change of building use, and

              (b) the building is suitable for occupation or use in accordance with its classification under the Building Code of Australia , and

              (c) such other matters as are required by the regulations to be complied with before such a certificate may be issued have been complied with.

48 As will be seen, subsection 5, providing for a final occupation certificate not to issue unless certain matters were satisfied, has a relevance to these proceedings. As is apparent, such an occupation certificate could not be issued unless a development consent was in force [there being no dispute about that fact in these proceedings].

49 As has already been noted, with respect to subclause 5(b) of section 109H the building approval of present relevance was issued pursuant to the transitional provisions. Hence that building approval simply became a construction certificate.

Environmental Planning and Assessment Regulation 2000

Division 3 Occupation certificates

50 Clause 149 of this regulation provided a number of pre-requisites concerning the content of an application for an occupation certificate and the documents required to be accompanied with any such application.

51 Subsection (1) required such an application contain information including "a description of the building to which the application relates, including the existing and new classifications of the building under the Building Code of Australia as identified by the development consent".

52 Clause 153 provided inter alia:


          Fire safety certificates: section 109H

          (1) In the case of a final occupation certificate to authorise a person:

              (a) to commence occupation or use of a new building, or
              (b) to commence a change of building use for an existing building
              a certifying authority must be satisfied that a final fire safety certificate has been issued for the building

53 Part 9 was entitled "Fire safety and matters concerning the Building Code of Australia". Division 1 included the following:

      166 Statutory fire safety measures (cf clause 80A of EPA Regulation 1994)


          The fire safety measures listed in the Table to this clause are statutory fire safety measures for the purposes of this Part.

          Table
          Access panels, doors and hoppers to fire-resisting shafts
          Automatic fail-safe devices
          Automatic fire detection and alarm systems
          Automatic fire suppression systems
          Emergency lifts
          Emergency lighting
          Emergency warning and intercommunication systems
          Exit signs
          Fire control centres and rooms
          Fire dampers
          Fire doors
          Fire hydrant systems
          Fire seals protecting openings in fire-resisting components of the building
          Fire shutters
          Fire windows
          Hose reel systems          		 Lightweight construction
          Mechanical air handling systems
          Perimeter vehicle access for emergency vehicles
          Portable fire extinguishers
          Safety curtains in proscenium openings
          Smoke alarms and heat alarms
          Smoke and heat vents
          Smoke dampers
          Smoke detectors and heat detectors
          Smoke doors
          Solid core doors
          Standby power systems
          Wall-wetting sprinkler and drencher systems
          Warning and operational signs

54 Division 2 entitled "Fire safety schedules" included the following:

      168 Fire safety schedules (cf clause 80C of EPA Regulation 1994)

          (1) When:

              (a) granting a development consent for a change of building use (other than a complying development certificate) in circumstances in which no building work is proposed by the applicant for the consent and no building work is required by the consent authority, or

              (b) issuing a complying development certificate for the erection of a building (other than a certificate that relates only to fire link conversion) or for a change of building use, or

              (c) issuing a construction certificate for proposed building work (other than a certificate that relates only to fire link conversion), or

              (d) giving a fire safety order in relation to building premises,

              the person doing so must issue a schedule (a fire safety schedule ) specifying the fire safety measures (both current and proposed) that should be implemented in the building premises…

          (3) A fire safety schedule:

              (a) must deal with the whole of the building, not merely the part of the building to which the development consent, complying development certificate, construction certificate or fire safety order relates, and

              (b) must include:
                  (i) such of the fire safety measures currently implemented in the building premises, and
                  (ii) such of the fire safety measures proposed or required to be implemented in the building premises,

              as are statutory fire safety measures, and
              (c) must distinguish between:
                  (i) the fire safety measures currently implemented in the building premises, and
                  (ii) the fire safety measures proposed or required to be implemented in the building premises, and

              (d) must identify each measure that is a critical fire safety measure and the intervals (being intervals of less than 12 months) at which supplementary fire safety statements must be given to the council in respect of each such measure, and
              (e) must specify the minimum standard of performance for each fire safety measure included in the schedule.

          (4) A copy of the fire safety schedule must be attached to (and is taken to form part of) the relevant development consent, complying development certificate, construction certificate or fire safety order and for the purposes of an appeal forms part of the development consent or construction certificate.

          (5) An earlier fire safety schedule is superseded by a later fire safety schedule, and ceases to have effect when the later fire safety schedule is issued.

      Division 3 Fire safety orders

      169 Fire safety schedules and fire safety certificates (cf clause 80D of EP&A Regulation 1994)


          (1) As soon as practicable after making a fire safety order, a person must cause copies of the fire safety schedule required by clause 168 to be given to the council and to the Fire Commissioner.

          (2) A person to whom a fire safety order is given in relation to any building must, within the time specified in the order, cause copies of a final fire safety certificate for the building (being a certificate issued after the requirements of the order have been complied with) to be given to the person by whom the order was given (and, if that person was not the council, to the council).

          Note. See also clause 172 which requires a copy of the ensuing fire safety certificate to be given to the Fire Commissioner.

      Division 4 Fire safety certificates

      170 What is a final fire safety certificate? (cf clause 80E of EP&A Regulation 1994)


          A final fire safety certificate is a certificate issued by or on behalf of the owner of a building to the effect that each essential fire safety measure specified in the current fire safety schedule for the building to which the certificate relates:

          (a) has been assessed by a properly qualified person, and

          (b) was found, when it was assessed, to be capable of performing to at least the standard required by the current fire safety schedule for the building for which the certificate is issued.

          Note. A final fire safety certificate must be provided before a final occupation certificate can be issued for a building under clause 153 (1), and must also be provided if a fire safety order is made in relation to building premises.
      171 Issue of final fire safety certificates


          (1) The assessment of essential fire safety measures must have been carried out within the period of 3 months prior to the date on which a final fire safety certificate is issued.

          (2) The choice of person to carry out an assessment is up to the owner of the building.

          (3) A person who carries out an assessment:

              (a) must inspect and verify the performance of each fire safety measure being assessed, and

              (b) must test the operation of each new item of equipment installed in the building premises that is included in the current fire safety schedule for the building.

          (4) A final fire safety certificate issued in relation to work that has been authorised or required by a development consent, construction certificate or fire safety order need not deal with any essential fire safety measure the subject of some other final fire safety certificate or fire safety statement issued within the previous 6 months, unless the person by whom the development consent, construction certificate or fire safety order is issued or given otherwise determines.

          (5) The person by whom the development consent, construction certificate or fire safety order is issued or given may make such a determination only if:

              (a) the person is of the opinion that the measure will be affected by the work, and

              (b) the person has specified in the fire safety schedule attached to the development consent, construction certificate or fire safety order that the final fire safety certificate issued in relation to the work must deal with that measure.

The breaches of statutory duty

55 In light of the legislative regime set out about, the finding is that the defendant failed to comply with its statutory obligations in a number of respects, including:


          The Approval of BA 390/97

          i. By approving BA 390/97 on the basis that the building was below 25 metres the defendant avoided the statutory obligation it was under to refer the application to the NSW Fire Brigade for comment under Clause 21 of the Local Government (Approvals) Regulation .

          ii. Clause 21 (1) of the Local Government (Approvals) Regulation 1993 required that an application for approval to erect a building which exceeds 25 metres in height must be forwarded to the Director General of the New South Wales Fire Brigade within seven (7) days of lodgement.

          iii. Clause 21 (2) imposed a duty on the Director General to comment and provide the council with a report detailing its views on the application in terms of the provisions of the BCA refereed to in a Table, including Clause E1.5 – the proposed design and installation of the sprinkler system.

          iv. Clause 21 (4) prohibited the Council from approving an application unless it had received a report from the Director General and taken the report into consideration.

          v. However, Clause 21(5) allowed the Council to approve the application without receiving a report from the Director General, if 35 days had elapsed.

          vi. Regulation 44 (4) allowed the council to exempt the building from any of the requirements of Part E.1 of the BCA if it had been furnished with a report by the Director General to the effect that a particular building should be exempted subject to any recommended conditions. No such report was sought by the defendant, or furnished by the Director General, in relation to this development.

          The issuing of interim and final occupation certificates

          vii. The Council was the principal certifying authority in relation to the building. It conducted both critical stage and periodic inspections of the works as they were being executed. Whilst it also relied upon specialist certification, materially in relation to the installation of essential fire services equipment, officers of the defendant also conducted their own inspections of the works prior to issuing interim and final certificates. On the face of the inspection documents it appears the officer of the defendant conducting the inspection also formed a view as to the adequacy of the installation [Inspection records dated 10 and 11 April 2000].
          viii. In issuing the final occupation certificate, the Council failed to discern that the building was not suitable for occupation or use generally and issued the final occupation certificate in the face of section 109G of the Environmental Planning and Assessment Act 1979, which required that no such certificate be issued unless the building was "suitable for occupation or use" in accordance with its classification under the Building Code of Australia.

Did the defendant owe a duty of care in exercising its statutory duties?

56 The salient principles for relevant purposes may be found as expressed in a number of relatively recent decisions of the High Court of Australia: The Council of the Shire of Sutherland v Heyman and Another (1984 - 1985) 157 CLR 424; Pyrenees Shire Council v Day (1998) 192 CLR 330; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1; Graham Barclay Oysters v Ryan (2002) 211 CLR 540, and Leichardt Municipal Council v Montgomery (2007) 233 ALR 200.

57 In Leichardt, Gleeson C J observed [at 12] that


          "the common law should define a duty of care to which an authority is subject by reference to the nature of the statutory powers given to the authority and the legislative intent discernible from the terms of those powers.”

58 In Sutherland Shire Council the seminal judgement of Mason J [in particular from 458 to 462] outlined the well-settled doctrines explaining that a public authority may be subject to a common law duty of care when it exercises a statutory power or performs a statutory duty. The separate and concurrent character of causes of action arising in Australia from breach of statutory duty and common-law negligence were emphasised [at 459]. The foundational principle [pointed up at 459 to 450] was that, generally speaking, a public authority which is under no statutory obligation to exercise a power comes under no common law duty to do so. However an authority may by its conduct place itself in such a position that it attracts a duty of care which calls for exercise of the power. Mason J [at 460] referred to situations in which an authority in control of a structure may attract at a duty of care. As his Honour [citing Lord Denning] emphasized, in such cases the statute did not by itself give rise to a civil action but formed the foundation on which the common law could build a cause of action. The proposition was that breach of the common law duty may arise from the failure of an authority's officers to ascertain that the statutory requirements were satisfied.

59 Mason J [at 461] referred to situations in which a public authority, not otherwise under a relevant duty, may place itself in such a position that others rely on it to take care for their safety, so that the authority comes under a duty of care calling for positive action. In his Honour's words:


          "[S]uch a relationship has been held to arise where a person, by a practice or past conduct upon which other persons come to rely , creates a self-imposed duty to take positive action to protect the safety of the interests of another or at least to warn him that he or his interests are at risk.” [emphasis added]

60 In Pyrenees, McHugh J observed as follows:


          …The “general rule” said Dixon J in Smith v Leurs (1945) 70 CLR 256 at 262, “is that one man is under no duty of controlling another man to prevent his doing damage to a third”. Nor does the common law generally impose any duty on a person to take steps to prevent harm, even very serious harm, befalling another. …

          [ 102] In the absence of a contract, fiduciary relationship or statutory obligation, the common law makes a person liable in damages for the failure to act only when some special relationship exists between the person harmed and the person who fails to act. By a person's failure to act, I mean that person's failure to act divorced from positive conduct by that person that causes damage such as the failure to brake while driving a car. A special relationship may arise from the ownership, occupation or control of land or chattels, from the receipt of a benefit or from an undertaking, assumption of responsibility or invitation which might induce the person harmed to act or to refrain from acting…

          [107] First, the doctrine only applies in limited situations “of such magnitude or complexity that individuals cannot, or may not, take adequate steps for their own protection” [ Sutherland Shire Council v Heyman ( 1985) 157 CLR 424 at 464 per Mason J]. Thus, it applies only in those situations where individuals are vulnerable to harm from immense dangers which they cannot control or understand and often enough can not recognise. Controlling air traffic, fighting fires and inspecting the safety of aircraft are the examples that Mason J gave.

          [108] Secondly, the public authority must know or ought to know that the plaintiff will suffer damage unless care is taken. A public authority incurs no liability under the general reliance doctrine unless it has knowledge or imputed knowledge of the danger [ Pyrenees at 177]. In many cases where the doctrine applies, the public authority will already have a public duty, enforceable by mandamus, to consider whether it should exercise its power or perform its function. In some cases, its knowledge may be such that, though the power or function may be discretionary, it nevertheless has a public duty to act.

          [109] Thirdly, the fact that the authority owes a common law duty of care because it is invested with a function or power does not mean that the total or partial failure to exercise that function or power constitutes a breach of that duty. Whether it does will depend upon all the circumstances of the case including the terms of the function or power and the competing demands on the authority's resources.

61 In Crimmins [at 39 – 79] McHugh J observed as follows:


          "Common law courts have long been cautious in imposing affirmative common law duties of care on statutory authorities. Public authorities are often charged with responsibility for a number of statutory objects and given an array of powers to accomplish them. Performing their functions with limited budgetary resources often requires the making of difficult policy choices and discretionary judgments. Negligence law is often an inapposite vehicle for examining those choices and judgments. Situations which might call for the imposition of a duty of care where a private individual was concerned may not call for one where a statutory authority is involved. This does not mean that statutory authorities are beyond the law but it does mean that there may be special factors applicable to a statutory authority which negative a duty of care that a private individual would owe apparently similar circumstances. In many cases involving routine events, the statutory authority will be in no different position from an ordinary citizen, but where the authority is alleged to have failed to exercise a power or function, more difficult questions arise." [emphasis added]

62 In Graham Barclay, Gummow and Hayne JJ made the following observations:


          [146] The existence or otherwise of a common law duty of care allegedly owed by a statutory authority turns on a close examination of the terms, scope and purpose of the relevant statutory regime. The question is whether that regime erects or facilitates a relationship between the authority and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence.

          [147] Where the question posed above is answered in the affirmative, the common law imposes a duty in tort which operates alongside the rights, duties and liabilities created by statute. In some instances, a statutory regime may itself, in express terms or by necessary implication, exclude the concurrent operation of a duty at common law. An example is provided by Sullivan v Moody (2001) 75 ALJR 1570; 183 ALR 404. The court there said [at 62]:
              The statutory scheme that formed the background to the activities of the present respondents was, relevantly, a scheme for the protection of children. It required the respondents to treat the interests of the children as paramount. Their professional or statutory responsibilities involved investigating and reporting upon, allegations that the children had suffered, and were under threat of, serious harm. It would be inconsistent with the proper and effective discharge of those responsibilities that they should be subjected to a legal duty, breach of which would sound in damages, to take care to protect persons who were suspected of being the sources of that harm.

          [148] However, contrary to submissions put on behalf of the Attorney-General for Western Australia (as an intervener in this court), the discernment of an affirmative legislative intent that a common law duty exists, is not, and has never been, a necessary precondition to the recognition of such a duty. This may be contrasted with the action for breach of statutory duty, the doctrinal basis of which is identified as legislative intention [ Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397 at 405; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 459-461].

          [149] An evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi-faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial [ Pyrenees Shire Council v Day (1998) 192 CLR 330 at 377 [126]]. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated [ Howard v Jarvis (1958) 98 CLR 177 at 183; Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 550-552, 556-557]; the degree of vulnerability of those who depend on the proper exercise by the authority of its powers [ Burnie Port Authority v General Jones Pty Ltd at 551; Crimmins at 24-25 [44]-[46], 38-39 [91]-[93], 40-41 [100]]; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute [ Sullivan v Moody (2001) 75 ALJR 1570 at 1580-1581 [55]-[62]; 183 ALR 404 at 416-417]. In particular categories of cases, some features will be of increased significance. For example, in cases of negligent misstatement, such as Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at 16-17 [47], 23-24 [76] , reasonable reliance by the plaintiff on the defendant authority ordinarily will be a significant factor in ascertaining any relevant duty of care.

          [150] The factor of control is of fundamental importance in discerning a common law duty of care on the part of a public authority [ Burnie Port Authority v General Jones Pty Ltd (1994) at 551-552; Crimmins at 24-25 [43]-[46], 42-43 [104], 61 [166], 82 [227], 104 [304], 116 [357]; Brodie v Singleton Shire Council (2001) 206 CLR 512 at 558-559 [102]]. It assumes particular significance in this appeal. This is because a form of control over the relevant risk of harm, which, as exemplified by Agar v Hyde (2000) 201 CLR 552 at 562 [16], 564 [21], 581-582 [81]-[83], is remote, in a legal and practical sense, does not suffice to found a duty of care.

Dealing with some of the defendant's essential propositions

63 Mr Williams appearing for the Council contended that a matter going to the nub of the case was that the closest of consideration to the several relevant legislative provisions threw up the fact that the Council was not required at the development application stage to consider any provision in relation to the Building Code of Australia. He emphasised that DA 226 of 1996 was different from that which became DA 31 of 1997 which went forward. He initially sought to distance the Council from any suggested requirement that in relation to the later development application, there was any real connection with the earlier development application. However on closer reflection Mr Williams qualified what he had earlier said by making the following concession:


          [W]e don't wish to be taken to be suggesting that there could be no circumstances in which, not for the purposes of determining duty, but for the purposes of determining breach and looking at the standard of care that the Council undertook, …that in an appropriate instance it would not be open to the Court to look at what took place before the development application the subject of the building approval was filed and it may be perfectly permissible to look at the dealings between the Council and the developer at an earlier point in time. [transcript 165]

64 He went on to add:


          “We don't complain that Ms Olsson asks you to look at what took place at an earlier point in time for the purposes of erecting an argument that the Council failed in its duty of care in not vetting the development application when it came along claiming an effective height of less than 25 metres. That would be perfectly permissible in a tort action for your Honour to go beyond the narrow confines of the contractual position.

          What we say is one would look in vain for a term in any of the regulations, any of the statutory enactments that would impose a duty of care at the development application approval stage relevant to here, and we don't understand one has been identified.

65 Without being exhaustive the defendant's case seemed to rely heavily upon the following propositions:


          i. The test of whether or not the Council had breached a relevant duty was the Wednesbury test of manifest unreasonableness in circumstances: cf Associated Provincial Picture Houses Ltd v Wednesbury Corporation (1948) 1 KB 223

          ii. That test was not satisfied on the evidence adduced in these proceedings;

          iii. Section 109H of the Environmental Planning and Assessment Act 1979 in providing in subsection 5 (c) that a final occupation certificate must not be issued to authorise a person to commence occupation or use of the new building unless "the building is suitable for occupation or use in accordance with its classification under the Building Code of Australia " did not require the Council to be satisfied that every requirement of the BCA had been complied with.

66 The defendant’s submission is accepted insofar as the Court recognises that not every requirement of the Building Code of Australia which had not been complied with at a time when an application for a final occupation certificate was made would qualify as meaning that the building was not suitable for occupation or use. But clearly some such requirements would so qualify. And in the present instance, the effective height issue would clearly so qualify.

Dealing with the issues

67 As the authorities earlier set out in these reasons have made plain:


          i. the evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi-faceted inquiry.

          ii. Each of the salient features of the relationship must be considered.

          iii. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial.

          iv. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated;

68 In the present circumstances the nature of the control exercised by the Council in terms of the risk of harm which may eventuate was very real. The Council was the effective sole gateway to the obtaining of the requisite approvals from the fire safety authorities where the effective height of a building exceeded 25 metres.

69 Whilst a Council may clearly make mistakes in the exercise of its functions, to adopt the apophthegm of Sir Frederick Jordan, “there are mistakes and there are mistakes”: cf ex parte Hebburn Ltd; Re Kearsley Shire Council (1947) SR NSW 416 at 420; Holt v Cox 23 ACSR 590 at 597. Here the Council claims to have blithely accepted the effective height noted on the plans relating to the final building application, without querying how it had come about that the application departed from the earlier application in terms of the reduced effective height. No officer of the Council gave evidence on the matter.

70 The Council faces particular difficulties in light of the fact that its letter to the developer of 20 August 1996 indicates that, as of this date, it was well aware that the building height exceeded an effective height of 25 metres, so that in that regard the whole building was to be provided with a suitable sprinkler system in accordance with the Building Code of Australia.

71 The problem was compounded much later when, in relation to amended plans submitted to the Council for alterations to the ground floor retail area and car parking levels, the developer expressly sought from the Council confirmation that the overall building height complied as under 25 m [PX 196]. The Council responded as follows:


          "In relation to the effective height of the building as defined by the Building Code of Australia, I can advise that giving consideration to Council's methodology with respect to the determination of the original application the building with a landing level to the stairs of rl 6.926 and a top floor level of RL 31.921 will be considered to be below 25 m" [PX 197]

72 The Council squarely contends that because of the earlier history in which it was not obliged to check the developers estimate of height of the building and did not do so, this inception problem permeated throughout the whole of the various stages and approvals up to and including the issue of the final occupation certificates. The proposition is that in those circumstances, the Council, having not been under a statutory obligation to check the effective height of the building, came under no common law duty to do so.

73 The finding is that the Council by its conduct placed itself in such a position that it attracted a duty of care which called for the taking of special care in this area. It was relevantly in control of the structure. This was a relationship which gave rise to a common law duty of care because the Council, by a practice generally dictated by statute upon which other persons came to rely, created a self-imposed duty to take positive action to protect the safety and interests of persons such as those whom the body corporate represent. Any examination of the degree and nature of control exercised by the Council over the risk of harm with which these proceedings are concerned, yields the conclusion that those who would come to dwell in the building had a high degree of vulnerability and depended upon the proper exercise by the Council of its powers.

74 At the end of day the Council clearly issued the final certificates " that the building is suitable for occupation or use", which certificates qua the provision of a suitable sprinkler system [cf clause E 15 of the BCA] were simply incorrect. Enough had occurred between the lodging and approval of the original development application and the issue of these certificates, to have alerted the Council to the need for particular and special care to be taken with respect to what was the effective height of the building. The mezzanine issue was itself calculated to alert the Council to precisely that issue. But even were this not the case, the earlier history and the final occupation certificate issue combined to have alerted the Council to the need to take special care to comply with the need to ensure compliance with the additional fire requirements necessary for a building with an effective height of in excess of 25 metres.

Proportionate liability

75 While submissions were initially made with regard to proportionate liability, ultimately on a close examination of the relevant statutory provisions both parties conceded that that was not something which was an issue in these present proceedings.

The plaintiff’s standing

76 As a final procedural matter, the Court notes that the plaintiff has standing to represent the owners of the building in proceedings in which the owners are jointly entitled to bring proceedings, and which relate to common property. This right derives from the Strata Schemes Management Act 1996 (NSW) s 227:


          Owners Corporation may represent owners in certain proceedings

          (1) This section applies to proceedings in relation to common property.

          (2) If the owners of the lots in a strata scheme are jointly entitled to take proceedings against any person or are liable to have proceedings taken against them jointly, the proceedings may be taken by or against the owners corporation.

          (3) Any judgment or order given or made in favour of or against the owners corporation in any such proceedings has effect as if it were a judgment or order given or made in favour of or against the owners.

          (4) A contribution required to be made by an owner of a lot to another owner in relation to such a judgment debt is to bear the same proportion to the judgment debt as the unit entitlement of the contributing owner bears to the aggregate unit entitlement.

77 The alleged defects in the approved fire safety services affect the common property. I note that s 227(3) protects the defendant from any later claim being brought by any of the individual lot holders in the event that any judgment received by the plaintiff is not spent on the appropriate rectification works.

Damages

78 The Council has contended that, even if the relevant duty is found and breach is established, the plaintiff has not been able to show that it has suffered any loss. The Court need go no further than to find that the plaintiff has suffered loss. In that event, the proceedings will be referred out for the purpose of determination of the quantum of that loss.

79 In my view the plaintiff has crossed the barrier and shown that the non-compliant circumstances which prevail qua the fire safety systems are likely to require some real form of expenditure. In the circumstances where the quantum issue in its entirety is to be referred out, it is inappropriate for the Court to go beyond this finding presently. The concurrence of the New South Wales Fire Brigade in terms of what is or is not to be required will likely have to be obtained. The Senior Fire Safety Officer of the Council in his report of April 2003 made reference to any rectification issues requiring to be handled through a Notice of Proposed Order and subsequent Order (6) (Fire Safety) under the provisions of the EP&A Act 1979 [Exhibit EX at 336].

80 One further feature of the current position should also been mentioned. This is that, by letter of 9 September 2003 from the Council to the Owners Corporation, the Council required that the Owners Corporation not commence any major fire safety upgrading works. This is a curious world where the Council retains the power to order such works if it deems it appropriate to do so: yet defends these proceedings relying inter alia upon the proposition that it has never so ordered. Its forensic interest is obvious. Its inability to bind the exercise of its discretion into the future is also obvious. Indeed I am somewhat surprised that, holding in its power the entitlement to order such works if that was appropriate, nonetheless it contends that a finding of no loss is requisite.

Short minutes of order

81 The parties are to bring in short minutes of order which are to include the order for the reference out, on which occasion costs will be dealt with.

      ************
28/05/2008 - Typographical errors - Paragraph(s) [24] first line change June 2007 to June 1997, change 25 July 2007 to 25 July 1997;[76] third line change s 12 to s 227; [77] first line change s 12(3) to s 227(3)

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